North East SMEs with their sights set on international expansion are being hindered by poor service, unclear fees and a lack of appropriate products when using banks for international currency transfers, new research suggests.

As part of a survey of 1,000 senior decision makers in the UK, fintech company World First found 42% in the region felt their bank did not understand their foreign currency needs.

Over half of those using a bank admitted they did not understand the charges applied to their international currency transfers, while 42% said their banks failed to offer them a full range of appropriate products.

Additionally, more than a quarter (29%) said they did not think banks acted in their best interests when managing their foreign currency needs.

The research also highlighted the global ambitions of many SMEs in the region, with 91% saying international expansion was one of the best ways to grow their business.

A total of 53% said they still used a bank for their international currency needs, with over half (51%) of this group saying they had stuck with the same bank they had their business current account with.

However, 54% of businesses also said they would switch to an alternative if they knew of a credible provider.

World First CEO Jonathan Quin said: “SMEs, the engine room of our economy, are telling us that they are not being served well by the banks when it comes to fulfilling their foreign currency needs.

“If we want UK businesses to achieve their potential, particularly those in the scale-up phase and eyeing up international expansion, then we need to break down as many barriers for them as possible.

“More than half of businesses in our survey say that they have struggled to expand internationally and even if 1% of this is due to a lack of support from their FX provider, then this is simply too many.”

“UK SMEs collectively transfer around £78bn a year, so there is now a huge responsibility on the industry and policy makers to better educate businesses on the benefits of a well-managed currency strategy.

“Not only can a currency strategy offer certainty and security in what is likely to be a volatile year in currency markets, there are also significant cost savings to be had.

“For instance, if all the UK’s SMEs saved just 1% on their annual FX bill, this would amount to a whopping £780m in total savings.”

World First employs around 400 people in London, Sydney, Washington DC, Texas, Singapore and Hong Kong, and plans to expand into new countries.

The company has strategic partnerships with over 20 businesses, including Virgin Money and News International.